“Better to do one thing and do it well. “This is the second calls the” ten principles “that Google published shortly after its formation in 1997. Fifteen years later, the house proverb seems to have lived, judging by the dozens of projects launched by the Mountain View company. It is precisely to better manage this “business collection”, in the words of founder and CEO Larry Page, Google announced late Monday a major reorganization.
In the way an investment fund, the company will now be structured around a holding company called “Alphabet”, which will be listed instead of the current Google. The different business lines of the group will be well separated from each other, with an officer, and housed directly below Alphabet, both holding company and parent. The architecture, inspired by that of Berkshire Hathaway, the holding company of the investor Warren Buffett, should allow various businesses to evolve independently of each other while maintaining an entrepreneurial spirit.
“ This will make the management more efficient, allowing us to run independently of the activities that have nothing to do with each other , explained Larry Page in a posting on his blog Monday. This will be for the Alphabet to grow independently and with strong leaders. [...]. Sergey [Brin, the other founder, Editor's note] and I will be there to help them. “ The head structure should remain very slight, especially since his name” not intended to become a major brand , “said Larry Page.
Analysts applaud
As of fourth quarter 2015 results of the various entities will therefore be published separately, which will isolate the historical crafts, which still form nearly all of the group’s revenues. Some investors skeptical of many diversifications Google in remote areas of its core business, asking readability. “ This increased transparency for the establishment of Alphabet is good news , says Morgan Stanley analyst Brian Nowak. It will allow to better understand the profitability of core businesses of Google and its development projects still lose money . “
Better, some analysts say the organization will eventually even give some trades if necessary. Or acquire new ones more easily. Buoyed by these prospects, the Google title took up to 6.5% in the morning on Wall Street.
The big bang also entails the staff of the group. Larry Page and Sergey Brin, Google’s founders, and are distancing themselves from the traditional business to head the new entity. Sundar Pichai, unknown to the public although it is behind some great successes of Google Chrome and Android, becomes the new strong man. To him it is now up to thrive Google.
Elsa Conesa
New York Office
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